What happened

Shares of independent oil and gas producer California Resources Corporation (NYSE:CRC) are up 11.1% as of 11:00 a.m. EDT today. While there wasn't any news specific to the company today, the impetus for this stock gain is more than likely the increase in oil prices to more than $80 a barrel.

So what

Don't look now, but oil prices are on a tear. The international benchmark for crude oil -- Brent -- surpassed $80 a barrel today for the first time since 2014, while U.S. domestic prices also ticked up to more than $70 a barrel. There are myriad factors going into that price increase -- expected Iranian sanctions at the end of the year, further declines in Venezuela, U.S. pipeline capacity restrictions -- but the overall theme of these things is that expected supply growth isn't looking as if it will keep pace with demand too soon.

Silhouette of drilling rig.

Image source: Getty Images.

For many oil and gas producers, this is good news, as evidenced by several other exploration and production companies posting gains today. That is especially true for California because it is a highly indebted company. Even though its production costs are on the lower side of those of its peers, its burdensome debt load has eaten into profitability. 

If oil prices were to rise, it would free up some cash that the company can then use to potentially pay down debt, a move this producer's investors would welcome with open arms.

Now what

Higher oil prices are a welcome sign for this producer. From an investor's perspective, though, there is just too much debt on the balance sheet to be comfortable with a long-term investment. All it would take is another oil price crash to compromise this company again. 

It's easy to see why investors want to flock to oil stocks with oil prices topping $80 a barrel, but there are simply better options out there than California Resources Company.